China’s former securities regulator given suspended death sentence

Tong Daochi, a former senior Chinese official who worked at the World Bank, was given a suspended death sentence for corruption, becoming the latest high-ranking Communist Party member punished under President Xi Jinping’s anti-corruption campaign .

The 54-year-old who also worked at the Rand Corporation, a US-based think tank, was convicted after allegedly pocketing more than $41million in bribes and insider trading .

Tong’s conviction was the latest in a growing number of cases targeting the intersection between finance and the state.

Since 2012, Xi has targeted “tigers and flies,” or high and low government officials, over corruption allegations. The crackdown has ensnared around 2 million officials, including Xi’s political rivals and dissidents, as well as legitimate cases of corruption.

“Between 2004 and 2020, Tong took advantage of various positions he previously held to help others in areas such as business registration, business operations, loans and promotions and accepted money and property,” the official Xinhua news agency reported.

Tong’s alleged crimes included leaking “sensitive stock information to relatives and associates” while working at the China Securities Regulatory Commission. He confessed and handed over illicit money and property after his arrest.

The Central Commission for Discipline Inspection, the Chinese Communist Party’s anti-corruption watchdog, last October launched an investigation into 25 institutions, including the central bank, the banking and insurance regulator, stock exchanges and commercial banks. Dozens of officials from public banks, regulators and insurers have been named as under investigation.

The CCDI last month announced an investigation of Sun Guofeng, former head of the central bank’s monetary policy department, for “alleged serious violation of party discipline and law”.

Sun, 49, has held several positions in the People’s Bank of China’s monetary policy department and research institute since 1996, and has taught in the United States, including at Princeton and Stanford universities.

Alex Payette, managing director of Cercius Group, an elite Chinese politics consultancy, said Tong’s misdeeds mostly revolved around the 2015 stock market crash, “which was viewed internally as a sort of ‘ financial coup’ against the Xi administration”.

“In late 2015, several senior CSRC officials, including former Tong boss Yao Gang, were demoted and then placed under investigation for their alleged roles in the 2015 stock market crash,” Payette said.

“Yao was convicted of bribery and insider trading in September 2018 and sentenced to 18 years in prison. We believe Tong is part of that larger CSRC connection that was part of the market rout,” he added.

Civil servants convicted of corruption with suspended life or death sentences are usually released within 20 years.

But the use of capital punishment for financial crimes was rolled out last year when authorities executed Lai Xiaomin, the former chairman of state-controlled financial group Huarong, three weeks after his conviction.

Additional reporting by Cheng Leng in Hong Kong

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